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Q: when driving the engine temp goes up to 120 C when the air is on on 1996 Mercedes-Benz E320

when it is hot outside the engine temp goes higher when it is cool it hovers at a little higher than 100 C what is wrong?
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It could be many things, unfortunately and without experiencing the problem first hand or being able to do some basic diagnostic tests its hard to say. It could be a weak fan clutch, a thermostat that is not fully opening, a restricted radiator (not allowing coolant to circulate through all the cooling tubs of the radiator) or even the possibility of a mildly blown head gasket. Hard to tell without being able to do some basic tests.
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Patrick hit the nail on the head. I would recommend having your vehicle diagnosed sooner rather than later to avoid damaging any other components.
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